Our 12-month target price of Eur27.6 assumes Amplifon trades at 11x EV/EBITDA using 2026E EBITDA; this effectively assumes Amplifon trades in the 25th percentile of the stocks 2015-2019 range, which we believe sufficiently reflects slower-than-expected developments in the company's end-market

We identify the following risks to our view and the achievement of our target price. Key downside risks include greater-than-expected headwinds to volume and product mix as a result of the recessionary environment (especially as Amplifon is heavily exposed to Europe); intensifying competition; inability to execute on M&A integration. Key upside risks include significant corporate activity; a faster-than-expected recovery in the hearing aid market; and better cost control including in procurement and on wages.